Embraer last week finally firmed up its plans, announced in 2011, to re-engine the E-Jet family. The announcement of the selection of the Pratt & Whitey Geared Turbofan engine removes much of the ambiguity about the program. That ambiguity has likely suppressed sales of the current E-Jet, which has not generated orders recently, and will now intensify the competition with arch rival Bombardier, as well as with Sukhoi and Mitsubishi, who also compete in the 70-100 seat segment. It appears the re-engining will be only for the E-175/190/195 models and the future of the smallest member of the family, the E-170, is unclear. A potential stretch of the airplane, to accommodate additional passengers and compete more directly with Bombardier’s CSeries, remains uncertain, but preliminary information regarding a stretched E-198 model has emerged.
Entry into service for the second generation E-Jets is planned for 2018. The engine selection decision is an important milestone for this new program that will be formally launched later this year.
What does this mean for Embraer?
The E-Jet program from Embraer, after only seven years in service, had become economically obsolete when compared with the new technology CSeries from Bombardier and other new technology competitors. To maintain competitiveness, it became clear that Embraer needed to re-engine the aircraft with a new technology engine and enhance other elements of the airframe to improve economic performance. This program, with a new wing design as well as new engines, appears to be more complex than the A320neo program, and will revitalize the competitiveness of the E-Jet against its all-new competitors, much as Boeing has revitalized the competitiveness of the 737 with new derivatives on multiple occasions.
Embraer will utilize the PW1700G and PW1900G variants from Pratt & Whitney, with thrust ranges from 15,000 to 22,000 pounds. The PW1700G has the same 56in-diameter fan of the MRJ engine and the PW1900G has the 73in-diameter of the CSeries engine. The first engine is likely to be derived from the engine powering the MRJ and the second engine is likely to be derived from the one powering the CSeries. In combination with new aerodynamically advanced wings, state-of-the-art full fly-by-wire flight controls and other systems evolutions, they will result in double digit improvements in fuel burn, maintenance costs, emissions and external noise.
The new E-Jets will likely use lighter-weight carbon fiber composite and aluminum alloys in construction. Final decisions on the configuration of the aircraft have not yet been made. This early rendition of the new E-Jet is noteworthy in that the new wing does not have winglets as the current E-Jets have. Rather it has a swept-back wing tip, similar to those on the Boeing 777 and 787.
The E-Jets have been popular, with more than 900 currently in service with 63 customers from 43 countries. The impact of new competition from the MRJ, SSJ and CS100, resulted in airlines holding back on orders for the E-Jets, waiting for new technology from competitors and Embraer itself. After announcing late in 2011 the company would re-engine the airplane, the program was bound to suffer some uncertainty in the marketplace in the near-term. Embraer rightly recognized the competitive threats, and is moving to negate them – leveraging a proven product and large installed base.
With 63 customers, there is a lot Embraer can do in the interim to keep them happy, including offering interim lift with existing models and trading these for re-engined models later, reselling the earlier models to secondary customers.
There are big potential orders to come from American Airlines/US Airways and United Airlines as they have, and continue to, refine scope clauses and as the industry continues to consolidate. Embraer will now provide these airlines with a competitive option – although before 2018 competitors will benefit from being able to deliver new technology aircraft sooner. The revised E-Jet will change the competitive dynamics and introduces a new alternative for the aircraft selection process.
E-Jet vs. MRJ, SSJ and CSeries
The revised E-Jets are going to be more competitive with the Mitsubishi MRJ, Sukhoi Superjet and Bombardier CSeries than its current models. The direct competition will be between CS100, SSJ100, MRJ90 and E-198, which the re-engined model is currently being referred to in the industry. The following table contains specifications for the existing models, as well as our estimated specifications for the re-engined model from Embraer.
As the table illustrates, the E198 will become more capable and more competitive with the CSeries, SSJ100 and MRJ90 than the existing E-195. We expect an improvement in fuel burn of approximately 12-14% over existing models, depending on Embraer’s use of advanced materials to reduce aircraft weight in the final design, and the aerodynamic effectiveness of the new wing. While it is premature to estimate the economic impacts of the program, the P&W GTF engine should provide a 12% fuel burn benefit over the existing GE CF34-10 engines.
In the game of leapfrog, Embraer, with the E-Jet, was able to leapfrog Bombardier’s CRJ-700/900 series in the marketplace, and gained market success. The CSeries will leapfrog the E-Jet, forcing Embraer to re-engine the aircraft to maintain competitiveness. But this will not be a leapfrog situation, and the re-engined E-Jet is unlikely to gain economic advantage over the all-new high-technology CSeries.
What this means for P&W
This news means P&W has been selected for five new airplane programs; Airbus, Bombardier, Embraer, Mitsubishi and Irkut. This is a remarkable endorsement for the new GTF engine. Bear in mind the OEMs can select whatever engine they believe will provide airlines with the most reliable low cost performance. The programs that will use the GTF all require a highly reliable engine – one that will do perhaps eight flights per day. The fact that so many new airplane programs have selected the GTF speaks to the confidence the OEMs have in the new technology engine.
If there was any doubt at how disruptive the GTF has been, there can’t be any longer. This new engine allowed Bombardier to disrupt matters for Airbus and Boeing at the bottom end of their single aisle airplanes. CFM was forced to react also by developing its LEAP. IRKUT developed its MS-21 using the GTF. Similarly, new entrant Mitsubishi selected the GTF for its MRJ. Airbus responded with a GTF engine option (also offering the LEAP) for the A320 family. Then Boeing had to respond with a LEAP powered 737. Now we have Embraer selecting the GTF. This entire wave of new or updated offerings was either enabled or influenced by P&W, which is definitely back in the narrow-body business and gaining market share.
The Bottom Line: Embraer has made a strong choice in the GTF for its new airplane, and the new technology engines will enable the successful E-Jet program to remain competitive in the 100-seat marketplace.
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